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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
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Experience:  10 years experience
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Tax question When getting a 1099c, and there's money in

Customer Question

tax question When getting a 1099c, and there's money in an investment account (penalties to pull out), does IRS make you empty it, or reduce your basis? I think the money was rec'd as part of a divorce settlement, but I'm not sure. Further, this is in
regards ***** ***** 2013 late filed return. There was a BK and no assets at all at the time. The investment is 2015.
Submitted: 1 year ago.
Category: Tax
Expert:  PDtax replied 1 year ago.

Hi again. PDtax here.

Expert:  PDtax replied 1 year ago.

If you mean IRS has a tax lien that survived a chapter 7, they do not have the power to compel withdrawal in many cases. And the plan administrator might not comply either.

If you can expand a bit on the type of account, type of tax debt, and how the bankruptcy affected the lend, I can be more precise.